By Staff Writer
WASHINGTON, Apr 28, CMC -The World Bank Monday announced that it has approved new financing to support Dominica in its efforts to strengthen domestic revenue mobilization, enhance financial sector resilience, and promote biodiversity conservation and disaster preparedness to support better opportunities for its population.
Dominica faces the dual challenge of managing high disaster vulnerability and fiscal fragility. This initiative supports strategic policy reforms that are vital for building resilience, generating sustainable revenue, and protecting Dominica’s extraordinary natural heritage,” said Lilia Burunciuc, World Bank Division Director for the Caribbean.
The World Bank said that the new Development Policy Credit comprises an envelope of US$24 million and that Dominica, known as the “Nature Island of the Caribbean,” possesses exceptional biodiversity and marine ecosystems, which underpin its tourism-dependent economy.
However, the country’s development has been set back by natural disasters and climate-related shocks. Tropical Storm Erika in 2015 and Hurricane Maria in 2017 inflicted significant damage, and while Dominica was spared the worst of Hurricane Beryl in July 2024, the storm still caused infrastructural damage and disrupted livelihoods across the island.
“These disasters, coupled with other shocks, have significantly weakened the country’s public finances and financial system. Public debt surged to 118.2 per cent of gross domestic product (GDP) in 2020 and remains high at 103 per cent in 2024,” The World Bank said.
The Washington-based financial institution said in response to these challenges, the Dominica Strengthening Fiscal and Climate Resilience Programmatic Development Policy Credit was developed to support Dominica’s reform agenda.
The operation supports a series of policy measures aimed at advancing key economic and climate resilience reforms. This includes reforming excise taxes, special taxes applied to goods such as fuel, alcohol, and sugary drinks that can have harmful effects on health or the environment.
The financial institution said that the reforms are expected to boost revenue, reduce greenhouse gas emissions, and support better public health outcomes. The operation also strengthens financial oversight of key institutions like the Dominica Agricultural Industrial and Development Bank and credit unions, enhancing overall financial sector stability.
The second pillar supports efforts to safeguard Dominica’s marine ecosystems and increase climate resilience. Notably, it includes the establishment of the world’s first marine protected area dedicated to sperm whales.
The World Bank said revenue from swim-with-the-whales permits is expected to rise by 177 percent by 2027, supporting conservation, livelihoods, and eco-tourism.
Additionally, the government is adopting a new risk-based asset management system for public buildings to enhance disaster preparedness and guide investment in resilient infrastructure.
The World Bank said that by 2027, an estimated 40 per cent of public fixed assets are expected to be inventoried and prioritized for risk mitigation, improving Dominica’s capacity to respond to future climate shocks.
The initiative is aligned with Dominica’s National Resilience Development Strategy 2030 and the Climate Resilience and Recovery Plan 2020–2030. It was designed through extensive consultation with national stakeholders and development partners, particularly the Caribbean Development Bank and the International Monetary Fund.
Funding is provided by the International Development Association (IDA), the arm of the World Bank Group that supports low-income countries and small island economies. IDA’s grants and low-interest financing help countries invest in their futures, improve lives, and create safer, more prosperous communities around the world.
Unlike traditional project financing, Development Policy Credits provide budget support to governments that have already implemented agreed-upon policies and institutional reforms. With this approval, funds will be disbursed to Dominica’s treasury to support budgetary priorities aligned with the country’s resilience strategy.
CMC/ag/ir/2025
